Lunar New Year Holiday Quells Monday Financial Market Activity
January 23, 2023
Financial markets in China will be shut all week for the Lunar New Year holiday that ushers in the Year of the Rabbit. Hong Kong, Taiwan, Indonesia, Malaysia, Singapore, South Korea, and Vietnam are also closed today.
The euro touched a nine-month high overnight of $1.0923 but subsequently settled back under $1.09 to a net gain of just 0.2% compared to Friday’s close. The dollar has also eased 0.2% and 0.4% versus the Canadian and Australian dollars but is up 0.6% relative to the yen and 0.3% against sterling.
Ten-year U.S. Treasury and German bund yields are three basis points higher. Recent rhetoric from ECB officials have lately been somewhat more hawkish than Fed official comments.
U.S. stock market futures are up very modestly. Share prices jumped 1.3% today in Japan as the Bank of Japan’s ultra-ease monetary stance was not tightened further at last week’s policy review. European share prices have risen 0.2-0.5% in Germany, France, Spain and Great Britain.
Colder weather in Europe and the U.S. Northeast helped lift the price of oil by 1.0% today. The price of Bitcoin rose 0.6% so far and touched a 5-month high above $23,000. Gold is steady.
The State Bank of Pakistan‘s policy rate has been raised a full percentage point to a 24-year high of 17.0%. That’s 10 percentage points above the pandemic low of 7% that prevailed from June 2020 until an initial 25-basis point hike in September 2021. The previous rate hike in November was also by a full percentage point. CPI inflation, which crested in August at 27.3%, surpassed 20% in the final seven months of 2022 and was higher in December at 24.5% than in the previous months. Since Russia invaded Ukraine, core inflation has been climbing, too, and measures of longer-term expected inflation have risen as well. Central bank officials would like to restore the 5-7% inflation target corridor by late 2024.
Consumer confidence this month improved to a 16-month high in Turkey and a 5-month high in Denmark.
House price inflation in Canada slowed to a 27-month low of 3.9% in Canada last month.
Although at an 11-month low, Polish producer price inflation of 20.4% in December exceeded analyst forecasts and was not very far below the 323-month peak of 25.6% hit last June. On-year increases of 1.0% and 0.2% in Polish industrial production and retail sales in December represented 23- and 22-month lows.
Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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